If a comfortable retirement is on the horizon for you, congratulations! Though some might consider you one of the lucky ones, you know you have been working hard towards this goal for decades, and luck has nothing to do with it.
But, when you were making plans for your retirement savings, did you include a budget for health insurance? Here are things to consider that make health insurance a priority on your monthly spreadsheet.
Your Current Benefit Plan May Not Apply
In days gone by, Canadian retirees could rely on keeping their employee benefits plans after they left the working world behind. For most people now that’s no longer true. As companies work to reduce costs in every possible area, more Canadians are starting off retirement without any health insurance coverage at all.
For most people, having employer provided health insurance is the most important benefit they receive. Planning retirement without health insurance in place means suddenly you must pay out of pocket for services that aren’t covered by government health insurance that were covered by your employer plan. Or you must pay for your own health insurance. Which should you choose?
How Much Do Healthcare Expenses Cost?
When you have enjoyed the privilege of employer-sponsored benefits for a long time, it’s easy to take health insurance for granted. If you have been to see a dentist, a chiropractor, physiotherapist, or podiatrist, you are familiar with just a handful of the services that are not covered by government insurance. However, if these services were billed directly to your health insurance provider, you may not have a sense of just how much it costs.
The trick with budgeting for healthcare expenses on your own is that there is no way to know how high those costs will go. One prescription or health care service may be manageable on its own, but what if you need to see multiple service providers? The cost to pay for healthcare services could end up being as high as $8,000 per person, per year by 2035 for an older Canadian according to The Conference Board of Canada.
Even the provincial plans for prescription drug benefits and dental benefits for seniors may mean that you must pay out of pocket depending on your income and needs. It’s hard to set a financial plan for your retirement when your health needs are a moving target, and yet that is exactly what you need to do. Here are a number of things you can consider
- How much are your current healthcare costs, even if they fluctuate, like how much the medications that you and your spouse currently take?
- Will you need services like physio, chiropractic or massage therapy, glasses or contact lenses or other healthcare and medical equipment needs?
- Do you anticipate needing major dental care such as bridges?
- Do you or your spouse have pre-existing conditions?
- Will there be unexpected costs or health conditions based on health issues that run in the family?
- Are you anticipating needing surgery?
Budget for Health Insurance for Cost Certainty
Rather than trying to predict what will and will not remain covered by government plans or whether you’ve put enough aside for all your retirement years, purchasing your own health insurance plan will help provide the cost certainty you need in retirement. Your annual or monthly premium is a cost that you can allow for in your budget, without having to guess what will come next.
Your health insurance premium will vary based on a number of factors, including your age, your health history, and the plan you choose. If you are coming off a group benefits plan, you may be eligible for guaranteed acceptance if you apply for benefits within 90 days.
Everybody wants to keep their costs as low as possible, but when it comes to insurance benefits, it’s always a good idea to purchase as much coverage as you can comfortably afford. Keep in mind that if you find yourself with more coverage than you need, it’s easier to drop down to a lower tier of coverage. The other way around, however, poses more of a challenge. In fact, you may have to start the application process, including a medical questionnaire, all over again.
SBIS can help you plan for healthcare costs today
With so many coverage options and so many subtle differences between insurance carriers, it can be hard to decide about the right health insurance you need. When you planned for your retirement, you probably worked with a financial advisor who helped you make sense of it all. Is there any reason not to work with a professional insurance advisor like SBIS? Of course not!
SBIS is an expert in the complex world of health and travel insurance. For no additional cost, we provide you with the sound guidance you need to make an informed decision. When it comes to budgeting for retirement healthcare expenses, a little planning today can go a long way toward providing for a more financially secure tomorrow. With a healthcare budget firmly in place, you’ll be better empowered to make decisions that are good for your health—and your wallet.
Contact us today to get a free, no-obligation quote to help you determine how much to set aside in your post-retirement budget for the financial security of a health and dental insurance policy!
